NW insolvencies predicted to rise 25% in 2010

PERSONAL insolvency levels in the North West could reach the 18,000 mark in 2010, according to accountancy group RSM Tenon.
 
During 2009, around 15,000 people in the region entered a form of personal insolvency.
 
Statistics from RSM Tenon Tracker show an increase in the number of people entering both bankruptcy and Individual Voluntary Agreements (IVAs) in the North West – up 12% and 16% respectively on last year’s figures.  

In both Manchester and Liverpool bankruptcy and IVA levels remained relatively stable in 2009, compare with the previous year.
 
Bankruptcy in Manchester fell 1.5% to 1,031 and in Liverpool increased by 1.7% to 1,104. IVAs, meanwhile, increased by just 0.2% in Manchester to 856; and by 2.9% in Liverpool to 645.

RSM is predicting that personal insolvencies across Manchester and Liverpool will rise 8% (2,378) and 13% (2,240) respectively in 2010.

The introduction of Debt Relief Orders (DROs) in April has also had a significant impact on insolvency figures for 2009.  

DROs allow consumers with debts of less than £15,000, and minimal assets or surplus income, to write off their debts without entering into a full blown bankruptcy.

They made up around 9% of insolvencies in the region, with more than 1,400 people taking advantage of this new procedure.
 
Gill Wrigley, insolvency specialist at RSM Tenon, said: “After a slow start when they were launched on 6 April 2009, DROs have grown in popularity as the benefits of a lesser associated stigma and no court hearing are recognised.
 
“Nationally, we expect the number of DROs to continue to grow in 2010 as the ease and speed make this the preferred route for those people who fit the criteria.  In fact, if the recent trend for DROs to increase to more than 400 per week continues, we could see more than 20,000 DROs in 2010.”